This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Q3 stocks – page 6
Rio Tinto (RIO)
Shares in UK listed miners are currently trading around historic lows, with some at all-time lows. From a technical standpoint, investors may find the considerable upside potential attractive. On the other hand, ongoing US Dollar strength and concerns over growth in major commodities consumer China are looking set to keep commodity prices under pressure for some time yet, which could stifle hopes of a recovery. Rio Tinto impressed with its results on 16 July as production increased and the company continued to invest. That’s all good, but unfortunately RIO has no control over demand, which is still proving elusive in the absence of Chinese economic growth. For a more detailed report on all the UK Index miners, click here
Will RIO embrace technology to find a way out, or will one of its competitors? Will shares recover towards Feb 2014 highs 3640p? or will they break down below support around 2400p?
Technical observations
- Shares trading around 6-year lows
- 20-day MA proving resistive
- Volume diverged with recent share price bounce
Bloomberg Broker Consensus, RIO: 38% Buy, 50% Hold, 12% Sell;
Consensus target: 2920p (+21%)
Barclays (BARC)
Markets appear to be lapping up news that Barclays is to cut 7000 investment banking jobs by the end of 2016 while the UK bank is set to become smaller and less competitive as a result. Lower costs (via savings on wages and property) and reduced risk are seemingly encouraging buyers to the stock, but is confidence waning in the UK banking sector’s ability to compete at the highest levels?
Will they continue on towards highs of 297p and above, buoyed by a move away from high risk investment banking? Or will they pull back towards lows around 200p?
Technical observations
- Shares are nearing 2014 highs 297p in a 2-year sideways trading channel.
Bloomberg Broker Consensus, BARC: 63% Buy, 27% Hold, 10% Sell;
Consensus target: 303p (+5%)
« Back to Category
This research is produced by Accendo Markets Limited.
Research produced and disseminated by Accendo Markets is classified as non-independent research,
and is therefore a marketing communication. This investment research has not been prepared in accordance
with legal requirements designed to promote its independence and it is not subject to the prohibition on
dealing ahead of the dissemination of investment research. This research does not constitute a personal
recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published,
and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up,
and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance.
Prepared by Michael van Dulken, Head of Research
